[WSBAPT] Allocation of Estate costs to specific property causing the cost

[John Creahan]

I agree with Heather on this. I had a case in which real property (with cloudy title) was to be delivered to specific beneficiaries. The case was complicated for other reasons, and the details are hazy, but I'm pretty sure that I advised the trustee to allocate the title-clearing costs to the property's recipients. I may have researched the question (in Willis on Trusts or something similar) but don't have any cites.
In any case, I don't see any legal authority that would prohibit allocating expenses, and it appears to me to be common sense solution.
For something like a new roof, I would probably encourage the PR to talk to the beneficiary in advance.

John Creahan
206-621-5848
www.cairn-law.com<http://www.cairn-law.com/>


From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Heather deVrieze
Sent: Thursday, November 19, 2015 9:20 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Allocation of Estate costs to specific property causing the cost

Eric,

I have, without specific statutory authority, but what I see as common sense offset expenses related to specific property against income from that property. For example, rental property which is gifted to a particular beneficiary has rental income, out of the rents taxes, insurance, even mortgage payments on that property can be made, with the net rents due to the specific beneficiary. If there is no income against which to offset the expenses, I think there is an argument to be made that the beneficiary of the property owes the cost of those necessary items (property taxes, etc.), but if they didn't have a say (like the new roof) it might be harder to argue.

Heather


Heather S. de Vrieze
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Wednesday, November 18, 2015 5:23 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Allocation of Estate costs to specific property causing the cost

I didn't get many responses, but so far no one has come up with any case law or theory that avoids the basic rule under Ch. 11.10 RCW, where estate expenses and debts simply abate estate property ratably in accordance with their classification as gifts. So, I think the authority I thought was out there, ain't.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040



From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Friday, November 06, 2015 12:09 PM
To: WSBA Probate & Trust listserve (wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>)
Subject: [WSBAPT] Allocation of Estate costs to specific property causing the cost

I cannot find the authority that I swear is out there--

Estate expenses (costs of administration, post-death expenses) are normally paid from estate assets pursuant to the abatement statutes, RCW 11.10.

But, if the Estate includes an item property that causes specific expenses - for example, a house that requires a new roof to prevent new substantial damage from leaks during the rainy season, or even just payment of delinquent real property taxes - it is permissible to charge those specific expenses against that specific property.

In such a case, if the property is given to a particular heir (by specific bequest, or other distribution in kind), that heir's share of the estate is therefore charged specially with those expenses.

Anyone have authority, statutory or case law? Or am I searching for something that isn't there?

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040

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